Dec. 9 (Bloomberg) -- Kentz Corp., an Irish oil engineering
company, rose to a record in London trading after agreeing on a
$435 million acquisition that will see it expand into shale and
into Latin America.

Kentz surged 13 percent to 657.5 pence, the highest closing
price since starting to trade in February 2008, after agreeing
to buy the field-solutions unit of U.S.-based Valerus.

“Valerus has technical capabilities, allowing us to expand
to new geographies, and gives us new clients,” Kentz Chief
Executive Officer Christian Brown said today by phone. “We have
found a very healthy, very profitable business that supplements
our strategy.”

Oil-service providers are snapping up U.S. businesses to
take advantage of a boom in shale exploration in the country,
which now sees thousands of wells drilled every year.
Engineering companies have also flocked to areas off Brazil, the
site of the largest oil discovery in the Americas since 1976, as
investment in exploration and production there increases.

Kentz will finance the transaction by drawing down a $400
million loan, with the remaining funds coming from its own cash
reserves or a new $160 million revolving facility, it said in a
statement. The deal marks a turnaround for the company, which
was itself the subject of takeover bids earlier this year.

Earnings Prospects

The company expects the purchase to add 20 cents, or 30
percent, to earnings per share next year, Brown said. Kerbet
Ltd., its largest shareholder, will vote in favor of the
transaction, according to Kentz.

“This is a very solid acquisition and will be earnings-enhancing,” VSA Capital Ltd. said in a note. “Kentz continues
to make great progress in terms of contract wins and now this
acquisition, making it one of our key picks in the sector.”

The company expects the purchase to bring in “high-margin” contracts as it expands in the U.S. and taps
opportunities in Latin America, where Valerus is present in
Brazil, Mexico, Colombia and Venezuela, Kentz said.

Valerus’s field-solutions unit includes processing and
treating and production-equipment provision, the Houston-based
company said in a separate statement. Valerus’s remaining units
will be split off to form a new company to be named next year.

Kentz was advised on the transaction by Investec Plc. The
company is looking to make a further “small, bolt-on
engineering acquisition” valued at $5 million to $10 million,
Brown said, without giving a timeframe for the purchase.

This year Kentz received takeover bids from Amec Plc and
Germany’s M+W Group GmbH. Its board rejected both offers.